Case Law Details
ACIT Vs S. Mohan Kumar (ITAT Chennai)
Conclusion: Assessee failed to file necessary evidence to establish credits appearing in the names of above two persons in the books of account of the assessee as genuine transactions, therefore, addition of unexplained credits was rightly justified.
Held: AO made additions towards credits on the ground that the assessee could not file any evidence to explain the credits. AO had considered the issue in light of statement recorded from the assessee, Mr. S & Mr. K during the course of search and on the basis of their statements opined that both did not have any means to explain huge amount of advances given to the assessee. Therefore, AO had made additions in the hands of assessee on substantive basis and further, assessed very same credits in the hands of Mr. S & Mr. K on protective basis. During the second round of litigation, AO had made additions towards credits on very same basis and observed that except general statement, assessee could not furnish any specific evidence to justify credits in the name of both the parties. It was held that credits appeared in the name of the above two persons were not satisfactorily explained to the AO with necessary evidence to prove genuineness of transaction and creditworthiness of parties, although, the assessee had filed certain evidences to prove identity of the persons. It was well settled principles of law that when a credit appeared in the books of account of the assessee, then it was for the assessee to satisfactorily explain the credit with necessary evidence. Unless the assessee discharged its burden and explain credit, AO may treat the same as unexplained income of the assessee. In this case, the assessee failed to file necessary evidence to establish credits appearing in the names of above two persons in the books of account of the assessee as genuine transactions. Therefore, CIT(A) after considering relevant facts had rightly sustained additions made by AO.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
This bunch of five cross appeals filed by the Revenue, as well as the assessee are directed against common order passed by the learned Commissioner of Income Tax (Appeals) 18, Chennai dated 31.10.2019 and pertain to assessment years 2006-07, 2007-08 & 2008-09. Since, facts are identical and issues are common, for the sake of convenience, these appeals were heard together and are being disposed off, by this consolidated order.
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